MasterCard Inc.'s first-quarter profit rose 24 percent, beating expectations, as consumers spent more money on their credit and debit cards.
The company's shares rose 2.8 percent in premarket trading Tuesday after the world's second-largest card processing network said revenues increased more than expected.
People with MasterCards are swiping them more often than they did last year, said Jim Tierney, chief investment officer of money management firm W.P. Stewart, which owns MasterCard shares.
"To a large degree, that's a sign of the global economic recovery," said Tierney, adding that the company's pickup in revenue was also helped by new processing contracts that MasterCard won from its rivals.
MasterCard Chief Executive Ajay Banga, in a statement, cited "solid volume and processed transaction growth" and said the company continues "to launch new products, enter new geographies and open new acceptance channels."
Banga, who took the company's helm last year, is increasingly turning MasterCard abroad for growth, in the face of U.S. regulation and rival Visa's dominance of the U.S. debit card processing market. The payments industry hopes to find new sources of revenue through processing mobile or e-commerce payments in developing countries, where most consumers do not yet use credit or debit cards.
MasterCard's quarterly revenue rose 14.8 percent to $1.5 billion, and worldwide purchase volume increased 12.9 percent on a local currency basis.
The company reported a profit of $562 million, or $4.29 per share. That compares with $455 million, or $3.46 per share, in the year-ago period.
Analysts on average had expected $4.10 per share, according to Thomson Reuters I/B/E/S.
© 2024 Thomson/Reuters. All rights reserved.